The United Arab Emirates-based newspaper, Al-Ittihad, on Wednesday reported that a prisoners exchange deal between Lebanon's Hizbullah and Israel should be completed by the end of next summer.

The deal is to include two Israeli army reservists seized by Hizbullah and several Arab prisoners demanded by Hizbullah. The two Israeli soldiers were captured whilst patrolling on the Lebanese side of the border on July 12, 2006. Their capture led Israel to declare war on Lebanon.

According to Israeli sources, the main bone of contention in the exchange deal is Israel's demand for evidence that the soldiers are alive before committing to a deal. But Hizbullah has been insisting that Israel free prisoners for this information, including the Lebanese, Samir Kuntar, who is jailed in Israel since a 1979 attack in the northern Israel.

The negotiations between Israel and Hizbullagh are mediated by a German intelligence agent, who has recently been shuttling between Jerusalem and Beirut, the report added.